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Israeli Navy soldiers intercept one of several boats headed towards the Gaza Strip, in international waters in the Mediterranean Sea in this May 31, 2010 file photo. Image reviewed by the Israeli military.

JERUSALEM — Israel's blockade of the Gaza Strip was meant to push the area's economy "to the brink of collapse," according to a U.S. diplomatic cable released by Wikileaks on Wednesday, signaling that Israel was well aware that the policy was taking a heavy toll on the area's civilian population.

Israeli leaders have long maintained that the blockade was necessary to weaken the ruling Hamas militant group.

"Israeli officials have confirmed to Embassy officials on multiple occasions that they intend to keep the Gazan economy functioning at the lowest level possible consistent with avoiding a humanitarian crisis," it says.

"As part of their overall embargo plan against Gaza, Israeli officials have confirmed ... on multiple occasions that they intend to keep the Gazan economy on the brink of collapse without quite pushing it over the edge," it adds.

High-ranking Israeli official
The cable is headed "secret" and contains the name of a high-ranking official in the Israeli security establishment, followed by "strictly protect" in brackets.

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It details Israel's concern to control the flow of money to Hamas, saying Israel's National Security Council, part of Israel's security and intelligence community, "abides by the principal that Gaza should receive just enough money for the basic needs of the population but ... is not interested in returning the Gazan economy to a state of normal commerce and business."

"The agency tries to approve a reasonable amount of new money for entry into the territory each month; however, it will not permit any large scale transfer of assets from Ramallah-based banks to their branches in Gaza for fear of improving the purchasing power of entities wishing to harm Israel," the cable adds.

The cable concludes by saying that the U.S. government "should continue to encourage the Israelis to approve as much funding as possible each month, consistent with our mutual political/security objectives in Gaza."

It adds that the U.S. should also "continue to assist the PA to improve its regulatory regimes and due diligence."

In Gaza, Hamas spokesman Fawzi Barhoum called the WikiLeaks cable "more evidence of the crimes that the (Israeli) occupation government has done to our people."

Israeli government spokesman Mark Regev refused to comment.

Israel imposed the blockade after Hamas militants routed forces loyal to Palestinian President Mahmoud Abbas and seized control of Gaza in June 2007.

Its official policy was that it would never allow a humanitarian crisis to develop in Gaza.

The blockade failed to oust Hamas, though it brought Gaza's economy to a virtual standstill.

Blockade easedTens of thousands of jobs have been lost, exports have been largely halted, and for three years, Israel carefully monitored which types of consumer goods were allowed into the territory, while allowing all basic humanitarian goods in.

There are now virtually no restrictions on the entrance of consumer goods, and some Gaza businesses are again exporting.

Construction materials, sorely needed to repair damage from an Israeli military offensive two years ago, are still largely banned from entering. Israel claims they can be used by Hamas for fortifications.

The militant Islamic Hamas does not accept a role for a Jewish state in the Middle East and has sent dozens of suicide bombers into Israel, killing hundreds.

Some more pragmatic Hamas figures would accept a Palestinian state in the West Bank, Gaza and east Jerusalem as a temporary measure.

Since the Hamas takeover of Gaza, Palestinian militants have fired thousands of rockets at Israel's south. Israel holds Hamas responsible and claims Hamas gets financial backing and weapons from Iran.

The Associated Press contributed to this report.

Video: Growing up behind the blockade in Gaza

Transcript of: Growing up behind the blockade in Gaza

BRIAN WILLIAMS, anchor:We are back now with a rare look inside a place 1.5 million people call home. The Israelis call it a hotbed of terrorism, but the people who live there say they are prisoners of poverty and misery. It's the
Gaza Strip
, and it's once again gotten the world's attention after that raid on a ship trying to break
Israel
's blockade of
Gaza
to deliver what many say was food and basic supplies. The Israelis say some of those supplies could have been used as weapons.
Israel
tonight is still saying no to a
UN
investigation into the raid, but tonight our own
Tom Aspell
has a report from behind the blockade.

TOM ASPELL reporting:This is what you see when you cross the border from
Israel
into
Gaza
,
children
desperately scrambling for pebbles, pebbles to be ground into cement.
Israel
won't let cement into
Gaza
. It says the cement would be used for tunnels to smuggle weapons. So thousands of homes destroyed in the
2009
offensive can't be rebuilt. Some supplies, like groceries and even animals, are smuggled through hundreds of illegal tunnels under the border form
Egypt
.
Israel
says there's no humanitarian crisis. Some food and medicine is allowed in, but the
United Nations
says conditions have never been worse.

ASPELL:Deep poverty and also despair. Eighty percent of
Gazans
, like
Rushti Abotawela
, get their food from the
UN
. Born deaf, he has no chance of getting a job here. He and his family, two of them also deaf, live on $70 a month from the
Palestinian government
.
Israel
's blockade on
Gaza
isn't just about preventing goods from getting in, it's about preventing 1.5 million Palestinians from getting out. It sentences them to life inside a 140-square-mile prison. Life here is a struggle from birth. In
Gaza
's
Schiffer Hospital
, the best around, there isn't enough special formula for premature babies, not even enough incubators. So this baby is only one hour old, but there's no place for him?

Unidentified Man:Yeah.

Offscreen Voice:No place.

Man:No place.

ASPELL:Fifty percent of
Gazans
are
children
under 15. Mental health experts say 95 percent of all
children
in
Gaza
suffer from trauma and stress.

Dr.
AHMED ABU TAWAHEENA Most
important one of them is their violent behavior, aggressive behavior among school students, for example.

ASPELL:Eight-year-old
Mahmud Kaleel
has turned to music to erase memories of bombs and missiles during the
2009
offensive when he spent a month hiding in a basement.
Mahmud
had extreme mood swings, either laughing or crying constantly. His mother,
Anwan
, says music therapy now keeps him calm. Music may also be his escape. Given the chance,
Mahmud
says he'd like to pack up his instrument

Relatives embrace over the coffin of one of the victims of Israel's deadly raid on aid ships bound for Gaza at the Fatih Mosque in Istanbul on Thursday June 3. Nine people, eight Turks and a U.S. national of Turkish origin, were killed in Monday's pre-dawn raid by Israeli forces on the Turkish ferry, Mavi Marmara, the lead ship in an aid flotilla aiming to break the blockade of Gaza.
(Mustafa Ozer / AFP - Getty Images)
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Israeli Arab lawmaker Hanin Zoabi, right, who was on board the Gaza-bound flotilla when it was raided by Israeli forces Monday, attempts to speak at the Knesset, Israel's parliament, as Anastassia Michaeli, of the ultra-nationalistic Yisrael Beteinu party, center, is escorted off of the podium, in Jerusalem. Zoabi, an Arab lawmaker who sailed with the activists, was heckled when she took the podium in the Israeli parliament Wednesday. "Go to Gaza you traitor," Miri Regev, a lawmaker in the ruling Likud Party, screamed in Arabic. Michaeli was escorted out of the plenum after yelling abuse at Zoabi.
(David Vaaknin / AP)
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A young Muslim girl wears a Palestinian scarf as she performs a special prayer in support of Palestinians in Shah Alam outside Kuala Lumpur.
(Samsul Said / Reuters)
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Imams and mourners pray behind the Turkish flag-wrapped coffins of activists, who were killed when Israel seized a Turkish aid ship bound for Gaza, during a funeral ceremony at Fatih mosque in Istanbul.
(Murad Sezer / Reuters)
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Israel's Prime Minister Benjamin Netanyahu delivers a televised address at his office in Jerusalem June 2, 2010. Defending Israel's enforcement of its blockade of Gaza, Netanyahu said on Wednesday it was vital for the country's security and would stay in place.
(Jim Hollander / Pool via Reuters)
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Activists, seized during an Israeli commando raid on an aid convoy sailing to Gaza, are hugged by relatives following their arrival in Jordan, after crossing the Allenby Bridge crossing point between Israel and Jordan Wednesday.
(Muhammad Hamed / Reuters)
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An activist, arrested aboard a Gaza-bound ship, places his hands against the window of a bus as it leaves Ella prison in the southern Israeli city of Beersheba. Israel began expelling all activists seized during the raid on an aid convoy sailing to Gaza.
(Alberto Denkberg / Reuters)
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A Palestinian fisherman sits on his boat on the second day of a general strike at the port in Gaza City. Palestinians declared a three-day general strike following Israel's naval raid on an aid flotilla.
(Adel Hana / AP)
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Yemenis in Sanaa demonstrate Tuesday against the Israeli raid and decision to stop the convoy of ships reaching Gaza. Israeli officials have vowed to prevent any other ships from reaching the coastal territory.
(Mohamed Huwais / AFP - Getty Images)
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Police clash with protesters during a demonstration in Paris, France, Monday. France's President Nicolas Sarkozy accused Israel of a "disproportionate use of force" during the convoy raid in which nine people died.
(Lucas Dolega / EPA)
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A policeman stands over a handmade Star of David during a demonstration by Palestinians living in Greece and pro-Palestinian supporters in Athens. A Greek non-governmental organisation said Israeli forces in helicopters and inflatable boats fired on a Greek vessel in the aid convoy.
(Angelos Tzortzinis / AFP - Getty Images)
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Demonstrators protest against Israel in Taksim square, Istanbul. Three or four of the nine on the aid convoy who died are thought to have been Turkish.
(Leonhard Foeger / Reuters)
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Palestinian colleagues place an activist onto the back of a truck after she was wounded during a protest against Israel's interception of aid ships sailing to the Gaza strip at the Kalandia checkpoint in the West Bank town of Ramallah.
(Atef Safadi / EPA)
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Lebanese leftists and Palestinians carry a giant Turkish flag during a protest in Beirut against Israel's interception of aid ships sailing to the Gaza Strip.
(Sharif Karim / Reuters)
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Israeli police escort a wounded passenger who was with the Gaza aid flotilla as he is brought to Barzilay hospital in the southern city of Ashkelon.
(David Buimovitch / AFP - Getty Images)
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The Department of Veterans Affairs' promise to end by 2015 its massive, benefits backlog for disabled veterans has "stalled," according to an analysis released Monday by a leading veterans' organization.